Steven R. Landau

Economic Development Research Group, Inc. www.edrgroup.com

TRB 2012, January 24

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1. Setting the Stage Routine Economic Impact/Contribution Studies

2. Airport Cities, Airport Corridors, Aerotropolises

3. Evolving in US Nascent Formalized Airport Impact Zones

4. Defined Airport City

5. So What? Do Airport Cities Matter?

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Airport Business Activities Off-Airport

Airport Administration & operation

Construction, Engineering & Consulting

Passenger Airlines

Freight Airlines and Couriers

Catering Firms (non-airline owned)

FBOs & other General Aviation & Aviation Services

Janitorial and Cleaning Services

Security

Parking and Misc (i.e., non-profit orgs)

Ground Transportation (taxis, buses, limos)

Freight Forwarders

Rental Cars

Airport Eating & Drinking Concessions

Airport Retail Store Concessions

Suppliers Wages Spent in Economy Visitor Spending (lodging, meals, retail, entertainment, etc…)

Basic economic impact studies show regional importance of airports

Hub airports may attract a wide range of land uses including industrial, commercial, retail and residential units

These are the economic contributions of airports that are spread throughout a regional economy

Reliance on air cargo/Just-in-time deliveries

Business travel

Suppliers to airport businesses

Housing for airport workers and workers in other dependant businesses

Special Events & Access to High Priced Resorts

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“ATL…[allows] our international and interstate travelers to quickly and conveniently access our plant. Already, we have hosted visitors from every continent except Antarctica. It‟s more than important that KMMG stay connected internationally; it‟s essential”. Statement by Kia Motors

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ATL 2009 (Hartsfield Jackson Atlanta International Airport)

Jobs on Airport – 58,000

Jobs Off Airport (metro-Atlanta)

Suppliers to on-airport businesses/agencies 33,000

Supported by spending of workers‟ income 59,000

Supported by visitor spending (initial round) 170,000

Suppliers to businesses that receive visitor 83,000

spending & Spending of workers income

Production Jobs that rely on air cargo 31,000

TOTAL 434,000

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Applied to agglomeration economies on and off airport formed due to airport operations

Terms are used somewhat interchangeably

Airport Cities defined as an airport and proximate

land outside the fence

Airport corridor is development along a direct

surface transportation connection from an airport

Aerotropolis is more expansive, related to a

region influenced by an airport

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Aerotropolis

Airport City

Airport Corridor Airport

Source: Adapted from Peneda, Reis and Marcario, Critical Factors for Development of Airport Cities, Transportation Research Record, Journal of the Transportation Research Board, No. 2214

Foreign Trade Zones (airports, marine ports, and land borders)

Airports that are Customs Port of Entry are able to use Foreign Trade Zones (FTZ) to increase cargo volume

Marketed to companies involved with international trade. Companies defer, reduce or eliminate customs duties on products admitted to the zone

Foreign-trade zones are designated sites licensed by the Foreign-Trade Zones Board of the US Department of Commerce

Marine Districts Zoning designating land in the vicinity of fishing harbors and deep

water ports for marine-related industrial uses only.

Viewed as a way to preserve important economic sectors that create thousands of often industrial and logistics jobs

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Airport/Airport Operator State Airport/Airport Operator

State

Dallas/Fort Worth International Airport Board

TX JFK Intl. Airport NY

Greater Orlando Aviation Authority

FL St. Joseph County Airport Authority

IN

Maryland Aviation Administration

MD Operator: Richland-Lexington Airport

SC

Mobile Airport Authority AL Washington Dulles Foreign-Trade Zone

VA

City of Albuquerque Aviation Department

NM Great Falls International Airport Authority

MT

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Created in 1981 to establish, maintain and operate a 60-acre site within Butterfield Trail Industrial Park.

Today, El Paso FTZ is the fifth largest US general-purpose zone dollar volume, reaching a figure of $2 billion in FY 1999 and the largest FTZ on the U.S./Mexico Border.

21 sites containing 3,443 acres within El Paso County.

70 firms use the FTZ, handling more than 200 different items from more than 80 countries.

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Where regulatory measures are adopted to support & encourage uses specific to a transportation facility or feature

Examples include: Baltimore, MD; Gloucester, MA

DULLES CORRIDOR - Area includes more than 575,000 jobs, 30,000 business establishments

Picture of Tyson‟s Corner, 13 miles from IAD (Dulles Intl. Airport)

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DFW Use Plan focuses on over 5,200 acres for commercial use and open space in Euless, Irving, Grapevine & Coppell

Targeted development includes: commercial retail, commercial, hospitality/ entertainment, corporate campus, office, flex office, industrial, TOD (DART and commuter rail lines), aviation support, and aviation related uses

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Schiphol Business Complex Passenger Spending Airport Related Investment

As of 10/31/2010, a total of nearly 60,000 people were employed at a total of 514 companies located at Schiphol.

170,000 Jobs

120,000 Jobs (including airport and business complex)

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•Leverages a total of 290,000 jobs, and a contributes € 26 billion (approximately $33 billion) to the Dutch economy

Source: Wall Street Journal and The Schiphol Group

•Schiphol Airport City includes 300 acres, 5.8 million square feet of building

space. Real estate is divided up nearly evenly into office and warehouse.

The Netherlands owns about a 70% stake in Schiphol Group

Owning the property makes it different from other airport “cities”, where outside developers often buy & develop properties

Manage business mix, both for planning purposes and for attracting complementary businesses that boost the value of the airport location

Province of North-Holland regulates land use in the Schiphol area, including occupancy based on so-called „airport-relatedness‟ criteria

The closer the parcel of land is to the airport, the more airport-related the business

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Initially, land was sold that directly bordered airport

As the impact of the airport on the region expanded, so did the scale of development to the regional level.

Current trend is to develop multiple locations and to offer the sites to various target groups

in the airport area.

Not From An Economic Development Perspective if:

They are convenient locations for real estate development that would take place elsewhere, but they may be beneficial from a planning/land use policy/ concentrated development perspective

They service basic functions of commerce that are generated by airports (hotels and other visitor spending, freight forwarding, production & shipping of air cargo)

Yes, if

An airport city is used to pro-actively leverage the airport-asset to attract investment that otherwise would not be part of the airport‟s economic impact

What separates an airport-city (or airport corridor or aerotropolises) from the economic impact/contribution we see generated by medium or major hub airports?

Land use controls, land use set asides are what separates the economic development lure of an “airport city” form the likely economic development value of a hub airport

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